Consciousness and Economics

Healthcare provides good examples of the relationship of consciousness to economic outcomes.

For example, the other day my friend Patty K. sent me a factoid from Integrated Medicine: A Clinician’s Journal. It said,

Chronic disease accounts for 70% of annualized US healthcare costs, mostly due to continual hospital admissions for acute exacerbations or comorbidities of underlying chronic disease.3 Clearly, our current model of curative medicine is failing and not fiscally sustainable. We need an affordable, scientifically based model to bridge to an acceptable new medical paradigm—for doctors, patients, and the nation.

Here is a dramatic quantitative indicator — 70% of total healthcare costs in the nation — and it all stems from a mindset, in this case, about curative approaches to health taking a higher priority than preventative approaches.

To me this underscores the primacy of consciousness in economics. Thus, if you change the qualitative consciousness, and you will change the quantitative economic outcomes.

Another example of consciousness in economics is again found in healthcare. Here my friend Alok S. brought my attention to a great piece of investigative journalism of Atul Gawande printed in The New Yorker.

It chronicles how norms and values are created and upheld by different groups, even when those groups are ostensibly doing the same thing, in this case, practicing healthcare.

One group of doctors and administrators in McAllen, TX is very entrepreneurial and financially incented, to say it kindly. As owners of their clinics, and making commissions on every referal to other specialists, the cost per patient care in that community is one of the highest in the country.

By contrast, other groups — such as those in El Paso, TX, or Minneapolis, MN — even though practicing the very same professions, take more of a service and collective sensibility to their work. Patients are NOT profit centers. Consequently, health care is delivered to their community at half the cost of the McAllen group.

In both examples, the consciousness of the economic agent determines objective cost outcomes. How that agent comes to have the particular consciousness is of great importance.

Traditional economics has assumed a very singular, mono-type of human being: rational, self interested, perfectly knowledgable about all relevant data to his or her economic well being.

Not only is this a silly view of human nature, but, as these two examples illustrate, it completely misses the real leverage point of making economic differences.

The emerging area of “behavioral economics” is a good start in breaking this down. But so far, in my opinion, the work relies on a very rudimentary behavioral psychology. The behavioral economist still holds him- or herself separate from the phenomena that he/she is observing.

What is needed is an economics science that is self-reflective and examines its ontological assumptions. This is what I am interested in. It is a conscious economics.